Tuesday, July 2, 2013

Early signal to enter - 13JUL01

Good morning all,

With the close of markets on Monday, July 1st, I have a conditional entry signal for the long side. Conditional entries arise when not everything is confirming, but the primary timer system indicates that we should move long. This is the case.

The Long-Cash Ratio (LCR) system is my primary timer. This system ranks, on a daily basis, over 3000 stocks in terms of their performance relative to adaptive moving averages. The system has been in play since September 2008 and is an intermediate to long-term timer system. 

Here is the most recent LCR table:

Right-click on the image to open in a new tab or window.

Of significance here is that we've had three consecutive days of buying stocks, causing the slope of the LCR line to turn positive on a 2d, 3d, 5d, and 8d basis. Although the normal signal is to buy when the slope turns the 5d and 8d positive (e.g., this past Friday), this was the ONLY timer to indicate long this past Friday, and I feared another whipsaw. Monday's action was a bit of follow-through, and a number of internal indicators that I employ also started turning long (-ish), although this isn't a resounding "jump in with both feet". 

Let me re-iterate that -- not everything is moving long on the same day. We have a gradual thawing, but nothing to get too excited about.

The timer status table, which indicates a short-term, medium-term, and long-term timer state is below:

The short-term timer fired a few days ago when the thawing started to occur. I rarely follow this timer as it's too short for my liking.

The intermediate-term timer is just (conditionally) moving to the long side. The "mixed" state indicates that not everything that comprises this time is indicating long -- and indicating some caution. 

The long-term timer still indicates that we are in a bullish period.

I've updated my thrust list (see earlier thread) and the best stocks, relative to an EV-weighting methodology that I've developed, are located at the top. Nevertheless, ALL these stocks meet my "green screen" criteria and are candidates for longer-termed holdings.

As with all my musings, you are responsible for your own actions and I am not. Please take ownership for your decisions.